HB 1059

A bill to be entitled
2An act relating to operation of the Florida Lottery;
3amending s. 20.317, F.S.; clarifying provisions concerning
4regional offices; amending s. 24.101, F.S.; revising a
5reference; amending s. 24.102, F.S.; revising provisions
6relating to legislative intent to provide for the
7operation of the lottery under a management agreement;
8amending s. 24.103, F.S.; providing and revising
9definitions; amending s. 24.104, F.S.; revising provisions
10concerning the purpose of the Department of the Lottery to
11permit contracting with a manager; amending s. 24.105,
12F.S.; revising provisions concerning the powers and duties
13of the department to allow for possible contracting with a
14manager; providing that specified provisions apply
15regardless of whether the department contracts with a
16manager; deleting obsolete provisions; amending s. 24.107,
17F.S.; revising provisions concerning advertising and
18promotion of lottery games to conform to the possibility
19of contracting with a manager; amending ss. 24.108 and
2024.111, F.S.; revising provisions relating to security and
21contracts for goods or services to conform to the
22possibility of contracting with a manager; creating s.
2324.1115, F.S.; providing for a management agreement under
24which the lottery may be operated; providing intent;
25providing definitions; limiting the duration of such an
26agreement; providing limits on the games that may be
27offered under such an agreement; providing for an initial
28payment to the department by a manager; providing for
29royalty payments by a manager; providing for collection of
30funds in excess of a specified baseline growth percentage
31to ensure that the manager does not earn excess revenue;
32providing requirements for the contents of a management
33agreement; requiring periodic investigations of the
34performance by a manager; providing for a request for
35qualifications process to select a manager; providing for
36the public records status of specified materials under
37existing exemptions; providing for negotiations between
38one or more offerors and the department; providing
39selection procedures; requiring a public hearing;
40providing for designation of a manager by the Governor;
41providing for status of debt offering by the manager;
42providing for a time period for challenges to designation
43of a manager; providing department powers; prohibiting the
44department from selling the authorization to manage the
45lottery; providing that there is no prohibition on
46additional legislative authorization of other forms of
47gambling; amending s. 24.112, F.S.; revising provisions
48concerning retailers of lottery tickets to conform to the
49possibility of contracting with a manager; amending s.
5024.113, F.S.; providing that provisions concerning
51minority participation also apply if the lottery contracts
52with a manager; amending s. 24.114, F.S.; revising a
53reference; amending ss. 24.115 and 24.1153, F.S.; revising
54provisions relating to payment of prizes and assignment of
55prizes payable in installments, to conform to the
56possibility of contracting with a manager; amending s.
5724.117, F.S.; revising a reference; amending s. 24.118,
58F.S.; revising a reference; conforming provisions to the
59possibility of contracting with a manager; amending s.
6024.120, F.S.; revising a reference; conforming provisions
61to the possibility of contracting with a manager; amending
62s. 24.121, F.S.; revising provisions relating to
63allocation of revenues and expenditure of funds for public
64education to conform to the possibility of contracting
65with a manager; providing for a minimum allocation of
66proceeds received under a management agreement to the
67Florida Bright Futures Scholarship Program; amending ss.
6824.122, 24.123, and 24.124, F.S.; revising provisions
69relating to an exemption from taxation, state preemption,
70inapplicability of other laws, annual audit of financial
71records and reports, responsibility for ticket accuracy,
72and liability to conform to the possibility of contracting
73with a manager; providing an effective date.
75Be It Enacted by the Legislature of the State of Florida:
77     Section 1.  Subsection (3) of section 20.317, Florida
78Statutes, is amended to read:
79     20.317  Department of the Lottery.-There is created a
80Department of the Lottery.
81     (3)  The headquarters of the department shall be located in
82Tallahassee. However, the department may establish such regional
83offices throughout the state as the secretary deems necessary to
84perform its duties concerning the efficient operation of the
85state lottery.
86     Section 2.  Section 24.101, Florida Statutes, is amended to
88     24.101  Short title.-This chapter act may be cited as the
89"Florida Public Education Lottery Act."
90     Section 3.  Section 24.102, Florida Statutes, is amended to
92     24.102  Purpose and intent.-
93     (1)  The purpose of this chapter act is to implement s. 15,
94Art. X of the State Constitution in a manner that enables the
95people of the state to benefit from significant additional
96moneys for education and also enables the people of the state to
97play the best lottery games available.
98     (2)  The intent of the Legislature is:
99     (a)  That the net proceeds of lottery games conducted
100pursuant to this chapter act be used to support improvements in
101public education and that such proceeds not be used as a
102substitute for existing resources for public education.
103     (b)  That the lottery games be operated by a department of
104state government that functions as much as possible in the
105manner of an entrepreneurial business enterprise or with the
106assistance of an entrepreneurial business enterprise under a
107management agreement overseen by the department. The Legislature
108recognizes that the operation of a lottery is a unique activity
109for state government and that structures and procedures
110appropriate to the performance of other governmental functions
111are not necessarily appropriate to the operation of a state
113     (c)  That the lottery games be operated by a self-
114supporting, revenue-producing department or with the assistance
115of an entrepreneurial business enterprise under a management
116agreement with government oversight.
117     (d)  That the department be accountable to the Legislature
118and the people of the state through a system of audits and
119reports and through compliance with financial disclosure, open
120meetings, and public records laws and that any entity contracted
121with under a management agreement must also be accountable to
122the Legislature and the people of the state.
123     Section 4.  Section 24.103, Florida Statutes, is renumbered
124and amended to read:
125     24.103  Definitions.-As used in this chapter act:
126     (1)  "Department" means the Department of the Lottery.
127     (2)(4)  "Major procurement" means a procurement for a
128contract for the printing of tickets for use in any lottery
129game, consultation services for the startup of the lottery, any
130goods or services involving the official recording for lottery
131game play purposes of a player's selections in any lottery game
132involving player selections, any goods or services involving the
133receiving of a player's selection directly from a player in any
134lottery game involving player selections, any goods or services
135involving the drawing, determination, or generation of winners
136in any lottery game, the security report services provided for
137in this chapter act, or any goods and services relating to
138marketing and promotion that which exceed a value of $25,000.
139     (3)  "Management agreement" means that agreement entered
140into pursuant to which the state may contract with a manager to
141provide management services to the lottery, although under such
142an agreement the department shall continue to manage and operate
143the lottery, and further pursuant to which the manager may
144receive a certain share of lottery ticket sales or related
145proceeds in consideration of the payment of a fee or fees to the
147     (4)  "Manager" means an entity that provides management
148services to the lottery on behalf of the department under a
149management agreement.
150     (5)(3)  "Person" means any individual, firm, association,
151joint adventure, partnership, estate, trust, syndicate,
152fiduciary, corporation, or other group or combination and shall
153include any agency or political subdivision of the state.
154     (6)(5)  "Retailer" means a person who sells lottery tickets
155on behalf of the department or the manager pursuant to a
157     (7)(2)  "Secretary" means the secretary of the department.
158     (8)(6)  "Vendor" means a person who provides or proposes to
159provide goods or services to the department, but does not
160include an employee of the department, a retailer, or a state
162     Section 5.  Section 24.104, Florida Statutes, is amended to
164     24.104  Department; purpose.-The purpose of the department
165is to operate the state lottery as authorized by s. 15, Art. X
166of the State Constitution with or without a manager so as to
167maximize revenues in a manner consonant with the dignity of the
168state and the welfare of its citizens.
169     Section 6.  Subsections (2), (4), (6), (7), (9), (11),
170(15), (17), (18), and (19) of section 24.105, Florida Statutes,
171are amended to read:
172     24.105  Powers and duties of department.-The department
174     (2)  Supervise and administer the operation of the lottery
175with or without a manager in accordance with the provisions of
176this chapter act and rules adopted pursuant thereto.
177     (4)  Submit monthly and annual reports to the Governor, the
178Chief Financial Officer, the President of the Senate, and the
179Speaker of the House of Representatives disclosing the total
180lottery revenues, prize disbursements, and other expenses of the
181department during the preceding month or, if the lottery has
182entered into a management agreement, comparable information
183provided by the manager. The annual report shall additionally
184describe the organizational structure of the department,
185including its hierarchical structure, and shall identify the
186divisions and bureaus created by the secretary and summarize the
187departmental functions performed by each.
188     (6)  Maintain weekly or more frequent records of lottery
189transactions, including the distribution of tickets to
190retailers, revenues received, claims for prizes, prizes paid,
191and other financial transactions of the department. If the
192department has entered into a management agreement, the
193agreement shall require the manager to maintain comparable
195     (7)  Make a continuing study of the lottery to ascertain
196any defects of this chapter act or rules adopted thereunder
197which could result in abuses in the administration of the
198lottery; make a continuing study of the operation and the
199administration of similar laws in other states and of federal
200laws that which may affect the lottery; and, if the department
201has not entered into a management agreement, make a continuing
202study of the reaction of the public to existing and potential
203features of the lottery.
204     (9)  Adopt rules governing the establishment and operation
205of the state lottery, including:
206     (a)1.  The type of lottery games to be conducted.
207     2.  Regardless of whether the department has entered into a
208management agreement, except that:
209     a.1.  No name of an elected official shall appear on the
210ticket or play slip of any lottery game or on any prize or on
211any instrument used for the payment of prizes, unless such prize
212is in the form of a state warrant.
213     b.2.  No coins or currency shall be dispensed from any
214electronic computer terminal or device used in any lottery game.
215     c.3.  Other than as provided in sub-subparagraph d.
216subparagraph 4., no terminal or device may be used for any
217lottery game that which may be operated solely by the player
218without the assistance of the retailer.
219     d.4.  The only player-activated machine that which may be
220utilized is a machine that which dispenses instant lottery game
221tickets following the insertion of a coin or currency by a
222ticket purchaser. To be authorized, a machine must: be under the
223supervision and within the direct line of sight of the lottery
224retailer to ensure that the machine is monitored and only
225operated by persons at least 18 years of age and; be capable of
226being electronically deactivated by the retailer to prohibit use
227by persons less than 18 years of age through the use of a
228lockout device that maintains the machine's deactivation for a
229period of no less than 5 minutes unless the machine uses a
230method of verifying the age of an operator that the department
231certifies is equivalent or superior to line-of-sight monitoring
232and lockout by the retailer. Such a machine must also; and be
233designed to prevent its use or conversion for use in any manner
234other than the dispensing of instant lottery tickets. Authorized
235machines may dispense change to players purchasing tickets but
236may not be utilized for paying the holders of winning tickets of
237any kind. At least one clerk must be on duty at the lottery
238retailer while the machine is in operation. However, at least
239two clerks must be on duty at any lottery location that which
240has violated s. 24.1055.
241     (b)  The sales price of tickets.
242     (c)  The number and sizes of prizes.
243     (d)  The method of selecting winning tickets. However,
244regardless of whether the department has entered into a
245management agreement, if a lottery game involves a drawing, the
246drawing shall be public and witnessed by an accountant employed
247by an independent certified public accounting firm. The
248equipment used in the drawing shall be inspected before and
249after the drawing.
250     (e)  The manner of payment of prizes to holders of winning
252     (f)  The frequency of drawings or selections of winning
254     (g)  The number and type of locations at which tickets may
255be purchased.
256     (h)  The method to be used in selling tickets.
257     (i)  The manner and amount of compensation of retailers.
258     (j)  Such other matters necessary or desirable for the
259efficient or economical operation of the lottery or for the
260convenience of the public.
261     (11)  In the selection of games and method of selecting
262winning tickets, be sensitive to the impact of the lottery upon
263the pari-mutuel industry and, accordingly, the department or the
264manager, if any, may use for any game the theme of horseracing,
265dogracing, or jai alai and may allow a lottery game to be based
266upon a horserace, dograce, or jai alai activity so long as the
267outcome of such lottery game is determined entirely by chance.
268     (15)  Or the manager, if any, shall have the authority to
269charge fees to persons applying for contracts as vendors or
270retailers, which fees are reasonably calculated to cover the
271costs of investigations and other activities related to the
272processing of the application.
273     (17)  Or the manager, if any, shall, in accordance with the
274provisions of this chapter act, enter into contracts with
275retailers so as to provide adequate and convenient availability
276of tickets to the public for each game.
277     (18)  Or the manager, if any, shall have the authority to
278enter into agreements with other states for the operation and
279promotion of a multistate lottery if such agreements are in the
280best interest of the state lottery. The authority conferred by
281this subsection is not effective until 1 year after the first
282day of lottery ticket sales.
283     (19)  Employ division directors and other staff as may be
284necessary to carry out the provisions of this chapter act;
286     (a)  No person shall be employed by the department who has
287been convicted of, or entered a plea of guilty or nolo
288contendere to, a felony committed in the preceding 10 years,
289regardless of adjudication, unless the department determines
291     1.  The person has been pardoned or his or her civil rights
292have been restored; or
293     2.  Subsequent to such conviction or entry of plea the
294person has engaged in the kind of law-abiding commerce and good
295citizenship that would reflect well upon the integrity of the
297     (b)  No officer or employee of the department having
298decisionmaking authority shall participate in any decision
299involving any vendor or retailer with whom the officer or
300employee has a financial interest. No such officer or employee
301may participate in any decision involving any vendor or retailer
302with whom the officer or employee has discussed employment
303opportunities without the approval of the secretary or, if such
304officer is the secretary, without the approval of the Governor.
305Any officer or employee of the department shall notify the
306secretary of any such discussion or, if such officer is the
307secretary, he or she shall notify the Governor. A violation of
308this paragraph is punishable in accordance with s. 112.317.
309     (c)  No officer or employee of the department who leaves
310the employ of the department shall represent any vendor or
311retailer or the manager, if any, before the department regarding
312any specific matter in which the officer or employee was
313involved while employed by the department, for a period of 1
314year following cessation of employment with the department. A
315violation of this paragraph is punishable in accordance with s.
317     (d)  The department shall establish and maintain a
318personnel program for its employees, including a personnel
319classification and pay plan which may provide any or all of the
320benefits provided in the Senior Management Service or Selected
321Exempt Service. Each officer or employee of the department shall
322be a member of the Florida Retirement System. The retirement
323class of each officer or employee shall be the same as other
324persons performing comparable functions for other agencies.
325Employees of the department shall serve at the pleasure of the
326secretary and shall be subject to suspension, dismissal,
327reduction in pay, demotion, transfer, or other personnel action
328at the discretion of the secretary. Such personnel actions are
329exempt from the provisions of chapter 120. All employees of the
330department are exempt from the Career Service System provided in
331chapter 110 and, notwithstanding the provisions of s.
332110.205(5), are not included in either the Senior Management
333Service or the Selected Exempt Service. However, all employees
334of the department are subject to all standards of conduct
335adopted by rule for career service and senior management
336employees pursuant to chapter 110. In the event of a conflict
337between standards of conduct applicable to employees of the
338Department of the Lottery the more restrictive standard shall
339apply. Interpretations as to the more restrictive standard may
340be provided by the Commission on Ethics upon request of an
341advisory opinion pursuant to s. 112.322(3)(a), for purposes of
342this subsection the opinion shall be considered final action.
343     (e)  If the department enters into a management agreement,
344no employee or contractor of the manager shall receive
345membership in the Florida Retirement System or any other state
346retirement or other state employee benefits on the basis of such
347employment or contract.
348     Section 7.  Section 24.107, Florida Statutes, is amended to
350     24.107  Advertising and promotion of lottery games.-
351     (1)  The Legislature recognizes the need for extensive and
352effective advertising and promotion of lottery games. It is the
353intent of the Legislature that such advertising and promotion be
354consistent with the dignity and integrity of the state. In
355advertising the value of a prize that will be paid over a period
356of years, the department or the manager, if any, may refer to
357the sum of all prize payments over the period.
358     (2)  The department or the manager, if any, may act as a
359retailer and may conduct promotions that which involve the
360dispensing of lottery tickets free of charge.
361     Section 8.  Subsections (2), (5), and (7) of section
36224.108, Florida Statutes, are amended to read:
363     24.108  Division of Security; duties; security report.-
364     (2)  The director and all investigators employed by the
365division shall meet the requirements for employment and
366appointment provided by s. 943.13 and shall satisfy the
367requirements for certification established by the Criminal
368Justice Standards and Training Commission pursuant to chapter
369943. The director and such investigators shall be designated law
370enforcement officers and shall have the power to investigate and
371arrest for any alleged violation of this chapter act or any rule
372adopted pursuant thereto, or any law of this state. Such law
373enforcement officers may enter upon any premises in which
374lottery tickets are sold, manufactured, printed, or stored
375within the state for the performance of their lawful duties and
376may take with them any necessary equipment, and such entry shall
377not constitute a trespass. In any instance in which there is
378reason to believe that a violation has occurred, such officers
379have the authority, without warrant, to search and inspect any
380premises where the violation is alleged to have occurred or is
381occurring. Any such officer may, consistent with the United
382States and Florida Constitutions, seize or take possession of
383any papers, records, tickets, currency, or other items related
384to any alleged violation.
385     (5)  The Department of Law Enforcement shall provide
386assistance in obtaining criminal history information relevant to
387investigations required for honest, secure, and exemplary
388lottery operations, and such other assistance as may be
389requested by the secretary and agreed to by the executive
390director of the Department of Law Enforcement. Any other state
391agency, including the Department of Business and Professional
392Regulation and the Department of Revenue, shall, upon request,
393provide the Department of the Lottery with any information
394relevant to any investigation conducted pursuant to this chapter
395act. The Department of the Lottery shall maintain the
396confidentiality of any confidential information it receives from
397any other agency. The Department of the Lottery shall reimburse
398any agency for the actual cost of providing any assistance
399pursuant to this subsection.
400     (7)(a)  After the first full year of sales of tickets to
401the public, or sooner if the secretary deems necessary, The
402department shall, as it deems appropriate, but at least once
403every 2 years engage an independent firm experienced in security
404procedures, including, but not limited to, computer security and
405systems security, to conduct a comprehensive study and
406evaluation of all aspects of security in the operation of the
408     (b)  The portion of the security report containing the
409overall evaluation of the department in terms of each aspect of
410security shall be presented to the Governor, the President of
411the Senate, and the Speaker of the House of Representatives. The
412portion of the security report containing specific
413recommendations shall be confidential and shall be presented
414only to the secretary, the Governor, and the Auditor General;
415however, upon certification that such information is necessary
416for the purpose of effecting legislative changes, such
417information shall be disclosed to the President of the Senate
418and the Speaker of the House of Representatives, who may
419disclose such information to members of the Legislature and
420legislative staff as necessary to effect such purpose. However,
421any person who receives a copy of such information or other
422information that which is confidential pursuant to this chapter
423act or rule of the department shall maintain its
424confidentiality. The confidential portion of the report is
425exempt from the provisions of s. 119.07(1) and s. 24(a), Art. I
426of the State Constitution.
427     (c)  Thereafter, similar studies of security shall be
428conducted as the department deems appropriate but at least once
429every 2 years.
430     Section 9.  Subsection (1) of section 24.111, Florida
431Statutes, is amended to read:
432     24.111  Vendors; disclosure and contract requirements.-
433     (1)  The department may enter into contracts for the
434purchase, lease, or lease-purchase of such goods or services as
435are necessary for effectuating the purposes of this chapter act.
436The department may not contract with any person or entity for
437the total operation and administration of the state lottery
438established by this chapter as provided in s. 24.1115 or act but
439may make procurements that which integrate functions such as
440lottery game design, supply of goods and services, and
441advertising. In all procurement decisions, the department shall
442take into account the particularly sensitive nature of the state
443lottery and shall consider the competence, quality of product,
444experience, and timely performance of the vendors in order to
445promote and ensure security, honesty, fairness, and integrity in
446the operation and administration of the lottery and the
447objective of raising net revenues for the benefit of the public
448purpose described in this chapter act.
449     Section 10.  Section 24.1115, Florida Statutes, is created
450to read:
451     24.1115  Management agreement.-
452     (1)  In construing this section, it is the intent of the
453Legislature that the manager be accountable to the Legislature
454and the people of this state through a system of audits and
455reports and by complying with the financial disclosure
456requirements of this section. The powers conferred by this
457section are in addition and supplemental to the powers conferred
458by any other law. If any other law or rule is inconsistent with
459this section, this section shall control as to any management
460agreement entered into under this section.
461     (2)  As used in this section, the term:
462     (a)  "Offeror" means a person or group of persons that
463responds to a request for qualifications under this section.
464     (b)  "Request for qualifications" means all materials and
465documents prepared by the department to solicit the following
466from offerors:
467     1.  Statements of qualifications.
468     2.  Proposals to enter into a management agreement.
469     (c)  "Selected offer" means the final offer of an offeror
470that is the preliminary selection to be the manager for the
471lottery under subsection (12).
472     (3)(a)  This section contains full and complete authority
473for a management agreement between the department and a manager
474and any rules adopted thereunder. No law, procedure, proceeding,
475publication, notice, consent, approval, order, or act by the
476department or any other officer, department, agency, or
477instrumentality of the state or any political subdivision is
478required for the department to enter into a management agreement
479under this section.
480     (b)  This section contains full and complete authority for
481the department to approve any subcontracts entered into by a
482manager under the terms of a management agreement.
483     (4)  Subject to the other provisions of this section, the
484department may enter into a management agreement with a manager
485for a term not to exceed 30 years.
486     (5)  The department may not enter into a management
487agreement that authorizes a manager to operate any of the
488following games or a game simulating any of the following games:
489     (a)  Video lottery games.
490     (b)  Pari-mutuel wagering on any form of racing.
491     (c)  A game in which winners are selected on the results of
492a race or sporting event.
493     (d)  Any other game commonly considered to be a form of
494gambling that is not a game or a variation of a game that the
495department operated before the management agreement is executed
496or is operating on the date the management agreement is
498     (6)(a)  The management agreement must establish a
499substantial benchmark amount. The management agreement must
500require the manager to make an initial payment to the department
501on the effective date of the management agreement in an amount
502that exceeds the benchmark amount established in the management
504     (b)  The initial payment required under paragraph (a) shall
505be deposited as provided in s. 24.121.
506     (c)  If the manager fails to make any payment under this
507section by the due date of the payment, the management agreement
508is terminated.
509     (7)(a)  The management agreement must require that all
510lottery proceeds initially be directly deposited with the state.
511The state shall provide sums due to the manager under the
512agreement only after all of the manager's obligations to the
513state have been satisfied.
514     (b)  The state shall retain an annual amount at least equal
515to the lottery proceeds for the last fiscal year preceding the
516agreement beginning on a date specified in the management
517agreement and occurring during the first year after the
518execution of the management agreement. For the purposes of this
519subsection, such annual amount shall be referred to as the
520"state annuity." The state annuity received under this
521subsection shall be deposited as provided in s. 24.121.
522     (c)  The management agreement must include the following
523provisions to ensure that the manager does not earn excess
524revenue under the management agreement:
525     1.  The Office of Policy and Budget in the Executive Office
526of the Governor shall calculate the percentage rate of average
527annual growth in gross revenue earned by the department during
528the last 5 full state fiscal years preceding the commencement of
529the management agreement. For purposes of this subsection, this
530percentage is referred to as the "baseline growth percentage."
531     2.  Beginning with the second full state fiscal year after
532the execution of the management agreement, the Office of Policy
533and Budget in the Executive Office of the Governor shall for
534each state fiscal year calculate the growth, expressed as a
535percentage, in gross revenue earned by the manager under the
536management agreement, as compared to the preceding state fiscal
538     3.  The department shall establish an excess payments
539account for purposes of this paragraph. Any earnings from money
540in the excess payments account accrue to the account. Money in
541the excess payments account may be used only to make payments to
542a manager as required by this paragraph and to receive payments
543from a manager as required by this paragraph.
544     4.  If the percentage calculated by the Office of Policy
545and Budget in the Executive Office of the Governor under
546subparagraph 2. for a particular state fiscal year exceeds the
547baseline growth percentage, the manager must make an additional
548payment to the department. The amount of the additional payment
549for the state fiscal year is equal to the gross revenue earned
550by the manager from lottery tickets in the state fiscal year
551multiplied by one-half the difference between the percentage
552calculated by the Office of Policy and Budget in the Executive
553Office of the Governor under subparagraph 2. for the state
554fiscal year and the baseline growth percentage. The department
555shall deposit any additional payment made by the manager under
556this subparagraph into the excess payments account.
557     5.  If the baseline growth percentage exceeds the
558percentage calculated by the Office of Policy and Budget in the
559Executive Office of the Governor under subparagraph 2. for a
560particular state fiscal year, the department must make a payment
561to the manager from the excess payments account. However, the
562department is required to make a payment to the manager only if
563the excess payments account has a positive balance. The amount
564of the payment by the department for the state fiscal year is
565equal to the lesser of:
566     a.  The result of the gross revenue earned by the manager
567from lottery tickets in the state fiscal year multiplied by one-
568half the difference between the baseline growth percentage and
569the percentage calculated by the Office of Policy and Budget in
570the Executive Office of the Governor under subparagraph 2. for
571the state fiscal year; or
572     b.  The balance in the excess payments account.
573     6.  The management agreement must specify the time by which
574a payment required under this paragraph shall be made.
575     7.  If at the expiration or termination of the management
576agreement there is money remaining in the excess payments
577account, it shall be retained by the department and deposited as
578provided in s. 24.121.
579     (8)  A management agreement must contain the following:
580     (a)  The original term of the management agreement.
581     (b)  A requirement that the manager locate its principal
582office within this state.
583     (c)  So long as manager complies with all the conditions of
584the agreement under the oversight of the department, the manager
585shall perform its duties and obligations with respect to
586management of the operation of the lottery, including the
588     1.  The right to use, or ownership of, equipment and other
589assets used in the operation of the lottery.
590     2.  The rights and obligations under contracts with
591retailers and vendors.
592     3.  The implementation of a comprehensive security program
593by the manager.
594     4.  The implementation of a comprehensive system of
595internal audits.
596     5.  The implementation of a program by the manager to curb
597compulsive gambling by persons playing the lottery.
598     6.  A system for determining the following:
599     a.  The type of lottery games to be conducted.
600     b.  The method of selecting winning tickets.
601     c.  The manner of payment of prizes to holders of winning
603     d.  The frequency of drawings of winning tickets.
604     e.  The method to be used in selling tickets.
605     f.  A system for verifying the validity of tickets claimed
606to be winning tickets.
607     g.  The basis upon which retailer commissions are
608established by the manager.
609     h.  Minimum payouts.
610     7.  A requirement that advertising and promotion must be
611consistent with the dignity and integrity of the state.
612     (d)  Guidelines to ensure that advertising and promoting of
613the lottery by the manager are not misleading and fairly balance
614the potential benefits and the potential costs and risks of
615playing lottery games.
616     (e)  A code of ethics for the manager's officers and
618     (f)  A requirement that the department monitor the
619manager's practices and take action that the department
620considers appropriate to ensure that the manager is in
621compliance with the terms of the management agreement, while
622allowing the manager, unless specifically prohibited by law or
623the management agreement, to negotiate and sign its own
624contracts with vendors.
625     (g)  A provision requiring the manager to periodically file
626appropriate financial statements in a form and manner acceptable
627to the department.
628     (h)  Cash reserve requirements.
629     (i)  Procedural requirements for obtaining approval by the
630department when a management agreement or an interest in a
631management agreement is sold, assigned, transferred, or pledged
632as collateral to secure financing. A management agreement or an
633interest in a management agreement may not be sold, assigned,
634transferred, or pledged as collateral to secure financing
635without the approval of the department.
636     (j)  Grounds for termination of the management agreement by
637the department or the manager.
638     (k)  Procedures for amendment of the agreement.
639     (l)  A provision prohibiting the department from entering
640into another management agreement under this section as long as
641the original management agreement has not been terminated.
642     (m)  The transition of rights and obligations, including
643any associated equipment or other assets used in the operation
644of the lottery, from the manager to any successor manager of the
645lottery, including the department, following the termination of
646or foreclosure upon the management agreement.
647     (n)  Ownership of all copyrights, trademarks, and service
648marks by the department in the name of the state and that any
649use of them by the manager shall only be for the purpose of
650fulfilling its obligations under the management agreement during
651the term of the agreement.
652     (o)  Minority participation as provided in s. 24.113.
653     (9)(a)  The manager shall undergo a complete investigation
654every 3 years by the department to determine whether the manager
655remains in compliance with this chapter and the management
657     (b)  The manager shall bear the cost of an investigation or
658reinvestigation of the manager under this subsection.
659     (10)(a)  Before the department enters into a management
660agreement pursuant to this section, the secretary, as provided
661in subsection (17), may retain an advisor or advisors to assess
662the fiscal feasibility of such an agreement and help determine
663whether to proceed. Such an advisor may also be retained by the
664department to represent the department in the request for
665qualifications process, if one is commenced. If the secretary
666decides to pursue the possibility of a management agreement, a
667request for qualifications must be issued as set forth in this
668section. A request for qualifications for a management agreement
669may be issued in one or more phases.
670     (b)  A request for qualifications must include the
672     1.  The factors or criteria that will be used in evaluating
673an offeror's statement of qualifications and proposal.
674     2.  A statement that a proposal must be accompanied by
675evidence of the offeror's financial responsibility.
676     3.  A statement concerning whether discussions may be
677conducted with the offerors for the purpose of clarification to
678ensure full understanding of and responsiveness to the
679solicitation requirements.
680     4.  A statement concerning any other information to be
681considered in evaluating the offeror's qualifications and
683     (c)  Notice of a request for qualifications shall be
684published twice at least 7 calendar days apart, with the second
685publication made at least 7 days before any initial submission
686is due.
687     (d)  As provided in a request for qualifications,
688discussions may be conducted with the offerors for the purpose
689of clarification to ensure full understanding of and
690responsiveness to the solicitation requirements.
691     (11)  The contents of proposals are competitive sealed
692replies in response to an invitation to negotiate for purposes
693of s. 119.071(1)(b) and are exempt from s. 119.07(1) and s.
69424(a), Art. I of the State Constitution until disclosure of the
695contents that are not otherwise exempt under s. 119.071 or other
696law is required under s. 119.071(1)(b).
697     (12)(a)  The department may negotiate with one or more
698offerors the department determines are responsible and
699reasonably capable of managing the lottery and may seek to
700obtain a final offer from one or more of those offerors.
701     (b)  The department shall consider the statement of
702qualifications and the proposals to enter into a management
703agreement that are submitted in response to a request for
704qualifications in making a determination under this section,
705including the following as they apply to the offeror and its
706partners, if any:
707     1.  Expertise, qualifications, competence, skills, and plan
708to perform obligations under the management agreement in
709accordance with the management agreement.
710     2.  Financial strength, including capitalization and
711available financial resources.
712     3.  Experience in operating government-authorized lotteries
713and gaming and other similar projects and the quality of any
714past or present performance on similar or equivalent
716     4.  Integrity, background, and reputation.
717     (c)  The requirements set forth in paragraph (b) also apply
718to the approval of any successor manager.
719     (13)(a)  After the final offers from offerors have been
720negotiated under subsection (12), the department shall:
721     1.  Make a preliminary selection of an offeror as the
722manager for the lottery; or
723     2.  Terminate the request for qualifications process.
724     (b)  If the department makes a preliminary selection of the
725manager under this subsection, the department shall schedule a
726public hearing on the preliminary selection and provide public
727notice of the hearing at least 7 days before the hearing. The
728notice must include the following:
729     1.  The date, time, and place of the hearing.
730     2.  The subject matter of the hearing.
731     3.  A brief description of the management agreement to be
733     4.  The identity of the offeror that has been preliminarily
734selected as the manager.
735     5.  The address and telephone number of the department.
736     6.  A statement indicating that, subject to subsection
737(11), and except for those parts that are confidential under s.
738119.071 or other applicable law, the selected offer and an
739explanation of the basis upon which the preliminary selection
740was made are available for public inspection and copying at the
741principal office of the department during regular business hours
742and, to the extent feasible, on the Internet.
743     (c)  Subject to subsection (11), and except for those parts
744that are confidential under s. 119.071 or other applicable law,
745the selected offer and a written explanation of the basis upon
746which the preliminary selection was made shall be made available
747for inspection and copying in accordance with s. 119.07 and, to
748the extent feasible, on the Internet at least 7 calendar days
749before the hearing scheduled under this section.
750     (d)  At the hearing, the department shall allow the public
751to be heard on the preliminary selection.
752     (14)(a)  After the hearing required under subsection (13),
753the department shall determine if a management agreement should
754be entered into with the offeror that submitted the selected
755offer. If the department makes a favorable determination, the
756department shall submit the determination to the Governor.
757     (b)  After review of the department's determination, the
758Governor may accept or reject the department's determination. If
759the Governor accepts the department's determination, the
760Governor shall designate the offeror who submitted the selected
761offer as the manager for the lottery.
762     (c)  After the Governor designates the manager, the
763department may execute a management agreement with the
764designated manager.
765     (15)  The manager may finance its obligations with respect
766to the lottery and the management agreement in the amounts and
767upon the terms and conditions determined by the manager.
768However, any bonds, debt, other securities, or other financing
769issued for the purposes of this section shall not be considered
770to constitute a debt of the state or any political subdivision
771of the state or a pledge of the faith and credit of the state or
772any political subdivision of the state.
773     (16)  An action to contest the validity of a management
774agreement entered into under this section may not be brought
775after the 15th day after the designation of the manager under
776the management agreement as provided in subsection (14).
777     (17)(a)  The department must use appropriate experts and
778professionals needed to conduct a competitive bidding proceeding
779as required under this section and may use the services of
780outside professionals to the extent necessary to carry out its
781obligations under this section.
782     (b)  The department may exercise any powers provided under
783this section in participation or cooperation with any other
784governmental entity and enter into any contracts to facilitate
785that participation or cooperation without compliance with any
786other statute.
787     (c)  The department may make and enter into all contracts
788and agreements necessary or incidental to the performance of the
789department's duties under this section and the execution of the
790department's powers under this section. These contracts or
791agreements are not subject to any approval by any other
792governmental entity and may be for any term of years within the
793time period of the management agreement under subsection (4) and
794contain any terms that are considered reasonable by the
796     (d)  The department may make and enter into all contracts
797and agreements with a state agency necessary or incidental to
798the performance of the duties and the execution of the powers
799granted to the department or the state agency in accordance with
800this section or the management agreement. These contracts or
801agreements are not subject to approval by any other governmental
802entity and may be for any term of years and contain any terms
803that are considered reasonable by the department or the state
805     (18)(a)  The department may not sell the authorization to
806operate the lottery.
807     (b)  Any tangible personal property used exclusively in
808connection with the lottery that is owned by the department and
809leased to the manager shall be owned by the department in the
810name of the state and shall be considered to be public property
811devoted to an essential public and governmental function.
812     (19)  The department may exercise any of its powers under
813this chapter or any other law as necessary or desirable for the
814execution of the department's powers under this section.
815     (20)  Neither this section nor any management agreement
816entered into under this section prohibits the Legislature from
817authorizing forms of gambling that are not in direct competition
818with the lottery.
819     Section 11.  Section 24.112, Florida Statutes, is amended
820to read:
821     24.112  Retailers of lottery tickets.-
822     (1)  If the department does not enter into a management
823agreement, the department shall adopt promulgate rules
824specifying the terms and conditions for contracting with
825retailers who will best serve the public interest and promote
826the sale of lottery tickets.
827     (2)  If the department does not enter into a management
828agreement, in the selection of retailers, the department shall
829consider factors such as financial responsibility, integrity,
830reputation, accessibility of the place of business or activity
831to the public, security of the premises, the sufficiency of
832existing retailers to serve the public convenience, and the
833projected volume of the sales for the lottery game involved. In
834the consideration of these factors, the department may require
835the information it deems necessary of any person applying for
836authority to act as a retailer. However, the department may not
837establish a limitation upon the number of retailers and shall
838make every effort to allow small business participation as
839retailers. It is the intent of the Legislature that retailer
840selections be based on business considerations and the public
841convenience and that retailers be selected without regard to
842political affiliation.
843     (3)  If the department does not enter into a management
844agreement, the department may shall not contract with any person
845as a retailer who:
846     (a)  Is less than 18 years of age.
847     (b)  Is engaged exclusively in the business of selling
848lottery tickets; however, this paragraph shall not preclude the
849department from selling lottery tickets.
850     (c)  Has been convicted of, or entered a plea of guilty or
851nolo contendere to, a felony committed in the preceding 10
852years, regardless of adjudication, unless the department
853determines that:
854     1.  The person has been pardoned or the person's civil
855rights have been restored;
856     2.  Subsequent to such conviction or entry of plea the
857person has engaged in the kind of law-abiding commerce and good
858citizenship that would reflect well upon the integrity of the
859lottery; or
860     3.  If the person is a firm, association, partnership,
861trust, corporation, or other entity, the person has terminated
862its relationship with the individual whose actions directly
863contributed to the person's conviction or entry of plea.
864     (4)  If the department does not enter into a management
865agreement, the department shall issue a certificate of authority
866to each person with whom it contracts as a retailer for purposes
867of display pursuant to subsection (6). The issuance of the
868certificate does shall not confer upon the retailer any right
869apart from that specifically granted in the contract. The
870authority to act as a retailer is shall not be assignable or
872     (5)  Any contract executed by the department under pursuant
873to this section shall specify the reasons for any suspension or
874termination of the contract by the department, including, but
875not limited to:
876     (a)  Commission of a violation of this chapter act or rule
877adopted pursuant thereto.
878     (b)  Failure to accurately account for lottery tickets,
879revenues, or prizes as required by the department.
880     (c)  Commission of any fraud, deceit, or misrepresentation.
881     (d)  Insufficient sale of tickets.
882     (e)  Conduct prejudicial to public confidence in the
884     (f)  Any material change in any matter considered by the
885department in executing the contract with the retailer.
886     (6)  Every retailer shall post and keep conspicuously
887displayed in a location on the premises accessible to the public
888its certificate of authority and, with respect to each game, a
889statement supplied by the department or the manager of the
890estimated odds of winning some prize for the game.
891     (7)  No contract with a retailer shall authorize the sale
892of lottery tickets at more than one location, and a retailer may
893sell lottery tickets only at the location stated on the
894certificate of authority.
895     (8)  If the department does not enter into a management
896agreement, with respect to any retailer whose rental payments
897for premises are contractually computed, in whole or in part, on
898the basis of a percentage of retail sales, and where such
899computation of retail sales is not explicitly defined to include
900sales of tickets in a state-operated lottery, the compensation
901received by the retailer from the department shall be deemed to
902be the amount of the retail sale for the purposes of such
903contractual compensation.
904     (9)  If the department does not enter into a management
906     (a)  The department may require every retailer to post an
907appropriate bond as determined by the department, using an
908insurance company acceptable to the department, in an amount not
909to exceed twice the average lottery ticket sales of the retailer
910for the period within which the retailer is required to remit
911lottery funds to the department. For the first 90 days of sales
912of a new retailer, the amount of the bond may not exceed twice
913the average estimated lottery ticket sales for the period within
914which the retailer is required to remit lottery funds to the
915department. This paragraph does shall not apply to lottery
916tickets that which are prepaid by the retailer.
917     (b)  In lieu of such bond, the department may purchase
918blanket bonds covering all or selected retailers or may allow a
919retailer to deposit and maintain with the Chief Financial
920Officer securities that are interest bearing or accruing and
921that, with the exception of those specified in subparagraphs 1.
922and 2., are rated in one of the four highest classifications by
923an established nationally recognized investment rating service.
924Securities eligible under this paragraph shall be limited to:
925     1.  Certificates of deposit issued by solvent banks or
926savings associations organized and existing under the laws of
927this state or under the laws of the United States and having
928their principal place of business in this state.
929     2.  United States bonds, notes, and bills for which the
930full faith and credit of the government of the United States is
931pledged for the payment of principal and interest.
932     3.  General obligation bonds and notes of any political
933subdivision of the state.
934     4.  Corporate bonds of any corporation that is not an
935affiliate or subsidiary of the depositor.
937Such securities shall be held in trust and shall have at all
938times a market value at least equal to an amount required by the
940     (10)  Every contract entered into by the department
941pursuant to this section shall contain a provision for payment
942of liquidated damages to the department for any breach of
943contract by the retailer.
944     (11)  The department shall establish procedures by which
945each retailer shall account for all tickets sold by the retailer
946and account for all funds received by the retailer from such
947sales. The contract with each retailer shall include provisions
948relating to the sale of tickets, payment of moneys to the
949department, reports, service charges, and interest and
950penalties, if necessary, as the department shall deem
952     (12)  No payment by a retailer to the department for
953tickets shall be in cash. All such payments shall be in the form
954of a check, bank draft, electronic fund transfer, or other
955financial instrument authorized by the secretary.
956     (13)  Each retailer shall provide accessibility for
957disabled persons on habitable grade levels. This subsection does
958not apply to a retail location that which has an entrance door
959threshold more than 12 inches above ground level. As used herein
960and for purposes of this subsection only, the term
961"accessibility for disabled persons on habitable grade levels"
962means that retailers shall provide ramps, platforms, aisles and
963pathway widths, turnaround areas, and parking spaces to the
964extent these are required for the retailer's premises by the
965particular jurisdiction where the retailer is located.
966Accessibility shall be required to only one point of sale of
967lottery tickets for each lottery retailer location. The
968requirements of this subsection shall be deemed to have been met
969if, in lieu of the foregoing, disabled persons can purchase
970tickets from the retail location by means of a drive-up window,
971provided the hours of access at the drive-up window are not less
972than those provided at any other entrance at that lottery
973retailer location. Inspections for compliance with this
974subsection shall be performed by those enforcement authorities
975responsible for enforcement pursuant to s. 553.80 in accordance
976with procedures established by those authorities. Those
977enforcement authorities shall provide to the Department of the
978Lottery a certification of noncompliance for any lottery
979retailer not meeting such requirements.
980     (14)  The secretary may, after filing with the Department
981of State his or her manual signature certified by the secretary
982under oath, execute or cause to be executed contracts between
983the department and retailers by means of engraving, imprinting,
984stamping, or other facsimile signature.
985     Section 12.  Section 24.113, Florida Statutes, is amended
986to read:
987     24.113  Minority participation.-
988     (1)  It is the intent of the Legislature that the
989department or the manager, if any, encourage participation by
990minority business enterprises as defined in s. 288.703.
991Accordingly, 15 percent of the retailers shall be minority
992business enterprises as defined in s. 288.703(2); however, no
993more than 35 percent of such retailers shall be owned by the
994same type of minority person, as defined in s. 288.703(3). The
995department or the manager, if any, is encouraged to meet the
996minority business enterprise procurement goals set forth in s.
997287.09451 in the procurement of commodities, contractual
998services, construction, and architectural and engineering
999services. This section shall not preclude or prohibit a minority
1000person from competing for any other retailing or vending
1001agreement awarded by the department or the manager.
1002     (2)  The department or the manager, if any, shall is
1003directed to undertake training programs and other educational
1004activities to enable minority persons to compete for such
1005contracts on an equal basis.
1006     Section 13.  Section 24.114, Florida Statutes, is amended
1007to read:
1008     24.114  Bank deposits and control of lottery transactions.-
1009     (1)  All moneys received by each retailer from the
1010operation of the state lottery, including, but not limited to,
1011all ticket sales, interest, gifts, and donations, less the
1012amount retained as compensation for the sale of the tickets and
1013the amount paid out as prizes, shall be remitted to the
1014department or deposited in a qualified public depository, as
1015defined in s. 280.02, as directed by the department. The
1016department shall have the responsibility for all administrative
1017functions related to the receipt of funds. The department may
1018also require each retailer to file with the department reports
1019of the retailer's receipts and transactions in the sale of
1020lottery tickets in such form and containing such information as
1021the department may require. The department may require any
1022person, including a qualified public depository, to perform any
1023function, activity, or service in connection with the operation
1024of the lottery as it may deem advisable pursuant to this chapter
1025act and rules of the department, and such functions, activities,
1026or services shall constitute lawful functions, activities, and
1027services of such person.
1028     (2)  The department may require retailers to establish
1029separate electronic funds transfer accounts for the purpose of
1030receiving moneys from ticket sales, making payments to the
1031department, and receiving payments from the department.
1032     (3)  Each retailer is liable to the department for any and
1033all tickets accepted or generated by any employee or
1034representative of that retailer, and the tickets shall be deemed
1035to have been purchased by the retailer unless returned to the
1036department within the time and in the manner prescribed by the
1037department. All moneys received by retailers from the sale of
1038lottery tickets, less the amount retained as compensation for
1039the sale of tickets and the amount paid out as prizes by the
1040retailer, shall be held in trust prior to delivery to the
1041department or electronic transfer to the Operating Trust Fund.
1042     Section 14.  Section 24.115, Florida Statutes, is amended
1043to read:
1044     24.115  Payment of prizes.-
1045     (1)  The department shall promulgate rules to establish a
1046system of verifying the validity of tickets claimed to win
1047prizes and to effect payment of such prizes; however, the
1048following shall apply whether the department does or does not
1049enter into a management agreement:
1050     (a)  The right of any person to a prize, other than a prize
1051that is payable in installments over time, is not assignable.
1052However, any prize, to the extent that it has not been assigned
1053or encumbered pursuant to s. 24.1153, may be paid to the estate
1054of a deceased prize winner or to a person designated pursuant to
1055an appropriate court order. A prize that is payable in
1056installments over time is assignable, but only pursuant to an
1057appropriate court order as provided in s. 24.1153.
1058     (b)  No prize shall be paid to any person under the age of
105918 years unless the winning ticket was lawfully purchased and
1060made a gift to the minor. In such case, the department or the
1061manager, if a management agreement is in force, shall direct
1062payment to an adult member of the minor's family or the legal
1063guardian of the minor as custodian for the minor. The person
1064named as custodian shall have the same powers and duties as
1065prescribed for a custodian pursuant to chapter 710, the Florida
1066Uniform Transfers to Minors Act.
1067     (c)  No prize may be paid arising from claimed tickets that
1068are stolen, counterfeit, altered, fraudulent, unissued, produced
1069or issued in error, unreadable, not received or not recorded by
1070the department or the manager, if a management agreement is in
1071force, by applicable deadlines, lacking in captions that confirm
1072and agree with the lottery play symbols as appropriate to the
1073lottery game involved, or not in compliance with such additional
1074specific rules and public or confidential validation and
1075security tests of the department or the manager, if a management
1076agreement is in force, appropriate to the particular lottery
1077game involved.
1078     (d)  No particular prize in any lottery game may be paid
1079more than once, and in the event of a binding determination that
1080more than one claimant is entitled to a particular prize, the
1081sole remedy of such claimants is the award to each of them of an
1082equal share in the prize.
1083     (e)  For the convenience of the public, retailers may be
1084authorized to pay winners amounts less than $600 after
1085performing validation procedures on their premises appropriate
1086to the lottery game involved.
1087     (f)  Holders of tickets shall have the right to claim
1088prizes for 180 days after the drawing or the end of the lottery
1089game or play in which the prize was won; except that with
1090respect to any game in which the player may determine instantly
1091if he or she has won or lost, such right shall exist for 60 days
1092after the end of the lottery game. If a valid claim is not made
1093for a prize within the applicable period, the prize shall
1094constitute an unclaimed prize for purposes of subsection (2).
1095     (g)  No prize shall be paid upon a ticket purchased or sold
1096in violation of this chapter act or to any person who is
1097prohibited from purchasing a lottery ticket pursuant to this
1098chapter act. Any such prize shall constitute an unclaimed prize
1099for purposes of subsection (2).
1100     (2)(a)  Eighty percent of all unclaimed prize money shall
1101be deposited in the Educational Enhancement Trust Fund
1102consistent with the provisions of s. 24.121(2). Subject to
1103appropriations provided in the General Appropriations Act, these
1104funds may be used to match private contributions received under
1105the postsecondary matching grant programs established in ss.
11061011.32, 1011.85, 1011.94, and 1013.79.
1107     (b)  The remaining 20 percent of unclaimed prize money
1108shall be added to the pool from which future prizes are to be
1109awarded or used for special prize promotions.
1110     (3)  The department or the manager, if a management
1111agreement is in force, shall be discharged of all liability upon
1112payment of a prize.
1113     (4)  It is the responsibility of the appropriate state
1114agency and of the judicial branch to identify to the department
1115or the manager, if a management agreement is in force, in the
1116form and format prescribed by the department or the manager,
1117persons owing an outstanding debt to any state agency or owing
1118child support collected through a court, including spousal
1119support or alimony for the spouse or former spouse of the
1120obligor if the child support obligation is being enforced by the
1121Department of Revenue. Prior to the payment of a prize of $600
1122or more to any claimant having such an outstanding obligation,
1123the department or the manager shall transmit the amount of the
1124debt to the agency claiming the debt and shall authorize payment
1125of the balance to the prize winner after deduction of the debt.
1126If a prize winner owes multiple debts subject to offset under
1127this subsection and the prize is insufficient to cover all such
1128debts, the amount of the prize shall be transmitted first to the
1129agency claiming that past due child support is owed. If a
1130balance of lottery prize remains after payment of past due child
1131support, the remaining lottery prize amount shall be transmitted
1132to other agencies claiming debts owed to the state, pro rata,
1133based upon the ratio of the individual debt to the remaining
1134debt owed to the state.
1135     Section 15.  Section 24.1153, Florida Statutes, is amended
1136to read:
1137     24.1153  Assignment of prizes payable in installments.-
1138     (1)  The right of any person to receive payments under a
1139prize that is paid in installments over time by the department
1140or the manager, if a management agreement is in force, may be
1141voluntarily assigned, in whole or in part, if the assignment is
1142made to a person or entity designated pursuant to an order of a
1143court of competent jurisdiction located in the judicial district
1144where the assigning prize winner resides or where the
1145headquarters of the department is located or where in the state
1146the headquarters of the manager is located, if a management
1147agreement is in force. A court may issue an order approving a
1148voluntary assignment and directing the department or the manager
1149to make prize payments in whole or in part to the designated
1150assignee, if the court finds that all of the following
1151conditions have been met:
1152     (a)  The assignment is in writing, is executed by the
1153assignor, and is, by its terms, subject to the laws of this
1155     (b)  The purchase price being paid for the payments being
1156assigned represents a present value of the payments being
1157assigned, discounted at an annual rate that does not exceed the
1158state's usury limit for loans.
1159     (c)  The assignor provides a sworn affidavit attesting that
1160he or she:
1161     1.  Is of sound mind, is in full command of his or her
1162faculties, and is not acting under duress;
1163     2.  Has been advised regarding the assignment by his or her
1164own independent legal counsel, who is unrelated to and is not
1165being compensated by the assignee or any of the assignee's
1166affiliates, and has received independent financial or tax advice
1167concerning the effects of the assignment from a lawyer or other
1168professional who is unrelated to and is not being compensated by
1169the assignee or any of the assignee's affiliates;
1170     3.  Understands that he or she will not receive the prize
1171payments or portions thereof for the years assigned;
1172     4.  Understands and agrees that with regard to the assigned
1173payments the department or the manager and its officials and
1174employees will have no further liability or responsibility to
1175make the assigned payments to him or her;
1176     5.  Has been provided with a one-page written disclosure
1177statement setting forth, in bold type of not less than 14
1178points, the payments being assigned, by amounts and payment
1179dates; the purchase price being paid; the rate of discount to
1180present value, assuming daily compounding and funding on the
1181contract date; and the amount, if any, of any origination or
1182closing fees that will be charged to him or her; and
1183     6.  Was advised in writing, at the time he or she signed
1184the assignment contract, that he or she had the right to cancel
1185the contract, without any further obligation, within 3 business
1186days following the date on which the contract was signed.
1187     (d)  Written notice of the proposed assignment and any
1188court hearing concerning the proposed assignment is provided to
1189the department's or the manager's counsel at least 10 days prior
1190to any court hearing. The department or the manager is not
1191required to appear in or be named as a party to any such action
1192seeking judicial confirmation of an assignment under this
1193section, but may intervene as of right in any such proceeding.
1194     (2)  A certified copy of a court order approving a
1195voluntary assignment must be provided to the department or the
1196manager no later than 14 days before the date on which the
1197payment is to be made.
1198     (3)  In accordance with the provisions of s. 24.115(4), a
1199voluntary assignment may not include or cover payments or
1200portions of payments that are subject to offset on account of a
1201defaulted or delinquent child support obligation or on account
1202of a debt owed to a state agency. Each court order issued under
1203subsection (1) shall provide that any delinquent child support
1204obligations of the assigning prize winner and any debts owed to
1205a state agency by the assigning prize winner, as of the date of
1206the court order, shall be offset by the department or the
1207manager first against remaining payments or portions thereof due
1208the prize winner and then against payments due the assignee.
1209     (4)  The department or the manager, and its respective
1210officials and employees, shall be discharged of all liability
1211upon payment of an assigned prize under this section.
1212     (5)  The department or the manager may establish a
1213reasonable fee to defray any administrative expenses associated
1214with assignments made under this section, including the cost to
1215the department or the manager of any processing fee that may be
1216imposed by a private annuity provider. The fee amount shall
1217reflect the direct and indirect costs associated with processing
1218such assignments.
1219     (6)  If at any time the Internal Revenue Service or a court
1220of competent jurisdiction issues a determination letter, revenue
1221ruling, other public ruling of the Internal Revenue Service, or
1222published decision to any state lottery or prize winner of any
1223state lottery declaring that the voluntary assignment of prizes
1224will affect the federal income tax treatment of prize winners
1225who do not assign their prizes, the secretary of the department
1226shall immediately file a copy of that letter, ruling, or
1227published decision with the Secretary of State and the Office of
1228the State Courts Administrator. A court may not issue an order
1229authorizing a voluntary assignment under this section after the
1230date any such ruling, letter, or published decision is filed.
1231     Section 16.  Section 24.117, Florida Statutes, is amended
1232to read:
1233     24.117  Unlawful sale of lottery tickets; penalty.-Any
1234person who knowingly:
1235     (1)  Sells a state lottery ticket when not authorized by
1236the department or this chapter act to engage in such sale;
1237     (2)  Sells a state lottery ticket to a minor; or
1238     (3)  Sells a state lottery ticket at any price other than
1239that established by the department;
1241commits is guilty of a misdemeanor of the first degree,
1242punishable as provided in s. 775.082 or s. 775.083.
1243     Section 17.  Subsections (4) and (5) of section 24.118,
1244Florida Statutes, are amended to read:
1245     24.118  Other prohibited acts; penalties.-
1246     (4)  BREACH OF CONFIDENTIALITY.-Any person who, with intent
1247to defraud or with intent to provide a financial or other
1248advantage to himself, herself, or another, knowingly and
1249willfully discloses any information relating to the lottery
1250designated as confidential and exempt from the provisions of s.
1251119.07(1) pursuant to this chapter commits act is guilty of a
1252felony of the first degree, punishable as provided in s.
1253775.082, s. 775.083, or s. 775.084.
1255     (a)  Any person who uses point-of-sale materials issued by
1256the department or the manager or otherwise holds himself or
1257herself out as a retailer without being authorized by the
1258department or the manager to act as a retailer commits is guilty
1259of a misdemeanor of the first degree, punishable as provided in
1260s. 775.082 or s. 775.083.
1261     (b)  Any person who without being authorized by the
1262department or the manager in writing uses the term "Florida
1263Lottery," "State Lottery," "Florida State Lottery," or any
1264similar term in the title or name of any charitable or
1265commercial enterprise, product, or service commits is guilty of
1266a misdemeanor of the first degree, punishable as provided in s.
1267775.082 or s. 775.083.
1268     Section 18.  Subsections (1) and (2) of section 24.120,
1269Florida Statutes, are amended to read:
1270     24.120  Financial matters; Operating Trust Fund;
1271interagency cooperation.-
1272     (1)  There is hereby created in the State Treasury an
1273Operating Trust Fund to be administered in accordance with
1274chapters 215 and 216 by the department. All money received by
1275the department which remains after payment of prizes and initial
1276compensation paid to retailers shall be deposited into the
1277Operating Trust Fund. All moneys in the trust fund are
1278appropriated to the department for the purposes specified in
1279this chapter act.
1280     (2)  Moneys available for the payment of prizes awarded by
1281the department, on a deferred basis shall be invested by the
1282State Board of Administration in accordance with a trust
1283agreement approved by the secretary and entered into between the
1284department and the State Board of Administration in accordance
1285with ss. 215.44-215.53. The investments authorized by this
1286subsection shall be done in a manner designed to preserve
1287capital and to ensure the integrity of the lottery disbursement
1288system by eliminating the risk of payment of funds when due and
1289to produce equal annual sums of money over the required term of
1290the investments.
1291     Section 19.  Subsections (1), (2), and (3) of section
129224.121, Florida Statutes, are amended to read:
1293     24.121  Allocation of revenues and expenditure of funds for
1294public education.-
1295     (1)  Variable percentages of the gross revenue from the
1296sale of online and instant lottery tickets shall be returned to
1297the public in the form of prizes paid by the department or
1298retailers as authorized by this chapter act. The variable
1299percentages of gross revenue from the sale of online and instant
1300lottery tickets returned to the public in the form of prizes
1301shall be established by the department in a manner designed to
1302maximize the amount of funds deposited under subsection (2).
1303     (2)  Each fiscal year, variable percentages of the gross
1304revenue from the sale of online and instant lottery tickets as
1305determined by the department consistent with subsection (1), and
1306other earned revenue up to the amount of the state annuity
1307requirement, excluding application processing fees, shall be
1308deposited in the Educational Enhancement Trust Fund, which is
1309hereby created in the State Treasury to be administered by the
1310Department of Education. If the department enters into a
1311management agreement, the proceeds received by the department
1312from the management agreement under s. 24.1115(7)(b) and (c)
1313shall be deposited in the Educational Enhancement Trust Fund,
1314with, at minimum, the greater of $400 million or one-third of
1315the funds deposited into the trust fund to be allocated to the
1316Florida Bright Futures Scholarship Program. The Department of
1317the Lottery shall transfer moneys to the Educational Enhancement
1318Trust Fund at least once each quarter. Funds in the Educational
1319Enhancement Trust Fund shall be used to the benefit of public
1320education in accordance with the provisions of this chapter act.
1321Notwithstanding any other provision of law, lottery revenues
1322transferred to the Educational Enhancement Trust Fund shall be
1323reserved as needed and used to meet the requirements of the
1324documents authorizing the bonds issued by the state pursuant to
1325s. 1013.68, s. 1013.70, or s. 1013.737 or distributed to school
1326districts for the Classrooms First Program as provided in s.
13271013.68. Such lottery revenues are hereby pledged to the payment
1328of debt service on bonds issued by the state pursuant to s.
13291013.68, s. 1013.70, or s. 1013.737. Debt service payable on
1330bonds issued by the state pursuant to s. 1013.68, s. 1013.70, or
1331s. 1013.737 shall be payable from, and is secured by a first
1332lien on, the first lottery revenues transferred to the
1333Educational Enhancement Trust Fund in each fiscal year. Amounts
1334distributable to school districts that request the issuance of
1335bonds pursuant to s. 1013.68(3) are hereby pledged to such bonds
1336pursuant to s. 11(d), Art. VII of the State Constitution.
1337     (3)  The funds remaining in the Operating Trust Fund after
1338transfers to the Educational Enhancement Trust Fund shall be
1339used for the payment of administrative expenses of the
1340department. These expenses shall include all costs incurred in
1341the department's direct operation and administration of the
1342lottery or the management agreement and all costs resulting from
1343any contracts entered into for the purchase or lease of goods or
1344services required by the lottery, including, but not limited to:
1345     (a)  The compensation paid to retailers;
1346     (b)  The costs of supplies, materials, tickets, independent
1347audit services, independent studies, data transmission,
1348advertising, promotion, incentives, public relations,
1349communications, security, bonding for retailers, printing,
1350distribution of tickets, and reimbursing other governmental
1351entities for services provided to the lottery; and
1352     (c)  The costs of any other goods and services necessary
1353for effectuating the purposes of this chapter act.
1354     Section 20.  Section 24.122, Florida Statutes, is amended
1355to read:
1356     24.122  Exemption from taxation; state preemption;
1357inapplicability of other laws.-
1358     (1)  This chapter act shall not be construed to authorize
1359any lottery except the lottery operated by the department or the
1360manager under pursuant to this chapter act.
1361     (2)  No state or local tax shall be imposed upon any prize
1362paid or payable under this chapter act or upon the sale of any
1363lottery ticket pursuant to this chapter act.
1364     (3)  All matters relating to the operation of the state
1365lottery are preempted to the state, and no county, municipality,
1366or other political subdivision of the state shall enact any
1367ordinance relating to the operation of the lottery authorized by
1368this chapter act. However, this subsection shall not prohibit a
1369political subdivision of the state from requiring a retailer to
1370obtain an occupational license for any business unrelated to the
1371sale of lottery tickets.
1372     (4)  Any state or local law providing any penalty,
1373disability, restriction, or prohibition for the possession,
1374manufacture, transportation, distribution, advertising, or sale
1375of any lottery ticket, including chapter 849, shall not apply to
1376the tickets of the state lottery operated pursuant to this
1377chapter act; nor shall any such law apply to the possession of a
1378ticket issued by any other government-operated lottery. In
1379addition, activities of the department under this chapter act
1380are exempt from the provisions of:
1381     (a)  Chapter 616, relating to public fairs and expositions.
1382     (b)  Chapter 946, relating to correctional work programs.
1383     (c)  Chapter 282, relating to communications and data
1385     (d)  Section 110.131, relating to other personal services.
1386     Section 21.  Section 24.123, Florida Statutes, is amended
1387to read:
1388     24.123  Annual audit of financial records and reports.-
1389     (1)  The Legislative Auditing Committee shall contract with
1390a certified public accountant licensed pursuant to chapter 473
1391for an annual financial audit of the department. The certified
1392public accountant shall have no financial interest in any vendor
1393or manager with whom the department is under contract. The
1394certified public accountant shall present an audit report no
1395later than 7 months after the end of the fiscal year and shall
1396make recommendations to enhance the earning capability of the
1397state lottery or the management agreement and to improve the
1398efficiency of department operations. The certified public
1399accountant shall also perform a study and evaluation of internal
1400accounting controls and shall express an opinion on those
1401controls in effect during the audit period. The cost of the
1402annual financial audit shall be paid by the department.
1403     (2)  The Auditor General may at any time conduct an audit
1404of any phase of the operations of the state lottery or the
1405management agreement and shall receive a copy of the yearly
1406independent financial audit and any security report prepared
1407pursuant to s. 24.108.
1408     (3)  A copy of any audit performed pursuant to this section
1409shall be submitted to the secretary, the Governor, the President
1410of the Senate, the Speaker of the House of Representatives, and
1411members of the Legislative Auditing Committee.
1412     Section 22.  Subsection (1) of section 24.124, Florida
1413Statutes, is amended to read:
1414     24.124  Responsibility for ticket accuracy; department,
1415retailer, and vendor liability.-
1416     (1)  Purchasers of online games tickets shall be
1417responsible for verifying the accuracy of their tickets,
1418including the number or numbers printed on the tickets. In the
1419event of an error, the ticket may be canceled and a replacement
1420ticket issued pursuant to rules adopted promulgated by the
1421department of the Lottery.
1422     Section 23.  This act shall take effect January 1, 2012.

CODING: Words stricken are deletions; words underlined are additions.